ARENA, Alinta agree funds for Port Augusta solar thermal study

The Australian Renewable Energy Agency has finally come to an agreement with the privately-owned Alinta to co-fund a feasibility study into a solar thermal power station to augment or replace the existing coal fired generators in the South Australian township of Port Augusta.

ARENA announced on Wednesday it would contribute $1million to the study, with $1.2 million to come from Alinta and a further $123,000 from the state government.

However, the study would not conclude until 2016, which may dash hopes for an earlier start to the project and a near-term replacement for the ageing Playford and Northern coal-fired power stations. Alinta recently said it wanted to extend the life of its two coal fired power stations for another two decades.

ARENA CEO Ivor Frischknecht said in a statement on Wednesday the feasibility study would provide an exciting opportunity to progress solar thermal in Australia.

“Tapping into our plentiful solar resources will ensure renewables are well placed to contribute to electricity generation in Australia,” he said.

“This latest partnership is an important step in our renewables journey – it complements existing solar thermal projects in Australia and will help create a framework of research, development and demonstration.”

Frischknecht said the study would look into hybridised and standalone solar thermal power generation options for Port Augusta.

“Many of our coal fired power stations are nearing the end of their life cycle, presenting a clear opportunity for renewable hybrid options,” Frischknecht said. “This timely study in South Australia will include a full feasibility stage exploring plant design, site and technical details.”

There have been other studies of hybridisation, but industry sources have told RenewEconomy that this can be difficult and costly when done with old power plants. Kogan Creek is relatively modern.

The Repower Port Augusta Alliance said a hybrid plant would not deal with our communities ongoing health concerns from the coal stations. “A solar/coal hybrid is just putting an old polluting power station on life support. Alinta and the government need to ensure we are investing in a full solution for our community which means solar thermal with storage, a technology which is operating around the world”, it said in a statement.

RenewEconomy’s view: It’s frustrating that while new solar thermal plants – with storage – are being built in the US, Chile and South Africa, and considered in China, the Middle east and north Africa, while in Australia we are committing to yet more feasibility studies, five years after the Solar Flagships program was first unveiled.

There are some reasons for this, none of them satisfactory. One is the uncertainty over carbon and clean energy policy. No large scale renewable plants can be committed to while the renewable energy target is under review, and there is a threat that the RET could be removed, or significantly diluted.

Another reason is that Alinta has an economic interest in keeping its coal-fired generators as long as possible. More renewable energy dilutes its returns, as it does for other fossil fuel generators, which is why Alinta has been one of the more aggressive opponents of keeping the RET as is. Alinta, it should be remembered, is owned by private equity interests (including TPG, the owner of Myer), and they will want to make a clean, profitable and uncomplicated exit within a few years. That may explain the length of the feasibility study.

The third is that ARENA has been stripped of more than $400 million in funds, which will make it difficult to contribute to such large scale developments. Alinta said in 2012 that it would need $65 million from the government to consider such a project. In its current budgetary straight-jacket, it is difficult to see how ARENA could afford that, despite its commitment to hybrid renewable projects. It’s much more likely to do this in remote and off-grid areas, where the costs of electricity much high, and the economics of incumbent plant are not threatened.

Giles Parkinson is founder and editor of Renew Economy, and is also the founder of One Step Off The Grid and founder/editor of The Driven. Giles has been a journalist for 35 years and is a former business and deputy editor of the Australian Financial Review.

Giles Parkinson is founder and editor of Renew Economy, and is also the founder of One Step Off The Grid and founder/editor of The Driven. Giles has been a journalist for 35 years and is a former business and deputy editor of the Australian Financial Review.

It’s a disgrace that ARENA agreed to terms that will see Alinta push for a coal-solar Hybrid. The entire point of CST is that it facilitates thermal storage at a good LCOE. If just supplementing coal then why not use PV arrays? The panels can be updated in a decade when 40-50% efficiency is feasible.

Can’t believe we campaigned for this. That’s why I constantly said during this campaign “If you sup with the devil take a very long spoon” The devil, for our purposes of saving what’s left of a safe climate, would be Alinta.

JohnRD 5 years ago

A hybrid that depends on coal fired continuing just doesn’t make commercial sense. A solar tower with number of mirrors and storage capcity aimed at peaking power may make better sense than something aimed at baseload.

wideEyedPupil 5 years ago

Let’s hope two years of super-funded ($2.5M) research gets them to reach a sensible conclusion rather than spend tax-payer moneys on Alinta’s exit strategy. It really saddens me that it’s Alinta getting this funding and not a pure play Renewable Energy company. I think the community campaign’s focus on getting Alinta onboard has proven to be a strategic mistake.

Alen 5 years ago

Sad to say but the way our government is going and acting towards renewables, even a hybrid sounds like a thing to cheer about